By Shilpa Shree; reposted with permission from AIM Group‘s Classified Intelligence Report.
PropTiger.com and housing.com in India are merging after several years of turmoil at housing.com, and the new entity will become India’s largest online real estate services company, the companies announced Tuesday.
Several media outlets positioned the deal as an acquisition by PropTiger rather than a merger. There was no immediate word on branding, and whether the two websites and brands would survive (as with Zillow and Trulia after their merger), or whether one brand — probably PropTiger — would survive, and housing.com would be subsumed.
News Corp., which is majority owner of PropTiger, will lead the company with its representative as chair of the merged company’s board. REA Group Ltd. of Australia, also majority-owned by News Corp., will invest $50 million (U.S.) into the merged entity, while a SoftBank affiliate will invest an additional $5 million.
SoftBank Group, a global investor and technology company based in Japan, was the lead investor in housing.com. The two companies have very different business models. PropTiger is an online and offline real estate company, participating in and facilitating transactions. Housing.com is a more traditional real estate website, generating 4 million visits monthly, according to the company.
Prior to the announcement, housing.com had an estimated $160 million (U.S.) in announced venture funding from SoftBank affiliates, Helion Venture Partners and others, while PropTiger had an announced $30 million from News Corp. in Nov. 2014. (Source: Crunchbase.)
Mahesh Murthy, founder of SeedFund, said the deal was “inconsequential from a business point of view. …
“The merger is only significant from SoftBank’s point of view. As a VC they’ve written off over 65 percent of their investment by value in housing.com and this is a face-saving merger, else Housing.com would have died on the vine. …
“‘Putting them out of their misery’ is probably more apt,” he told the AIM Group in an email interview.
Housing.com became a start-up rollercoaster in mid-2015, when founder/CEO Rahul Yadav melted down. He gave his stock to employees, resigned, returned, sent the company’s board a nasty email, and ultimately was fired in July 2015.
The company laid off hundreds of employees during the next few months, shut down underperforming parts of the business, and regrouped. Last month, it announced it would re-turn to the rental advertising market this year.
Dhruv Agarwala, co-founder and CEO of PropTiger, will serve as CEO. Jason Kothari, who took over as Housing CEO after Yadav, will leave the company at the end of next month.
Competitors in the Indian online real estate business include 99acres.com, owned by publicly traded Info Edge (India); magicbricks.com, owned by the parent company of the Times of India; QuikrHomes, a vertical of Quikr India Private Ltd.; and a number of smaller national and regional companies.
Most of those companies have actively been acquiring technology and smaller rivals the past couple of years.
PropTiger acquired listings site Maakan.com in April 2015, along with 3D and virtual reality companies OOBI (Out of Box Interactions) in April 2015 and 3DPhy in August 2016. News Corp. is already the largest online real estate company in the world, through its ownership of REA Group; Move Inc., parent of realtor.com in the U.S., and IProperty Group in Asia.
“India is an important part of our international growth strategy,” said Tracey Fellows, REA Group CEO. “We believe in the potential of the Indian real estate market. … The joint entity will have access to REA Group’s expertise and know-how from its operations across the globe.”
Sudharshan Purohit, founder of rental listing site Zenify.com, told the AIM Group the merger was “an obvious step. Housing.com is a more VC-managed company now; it was obvious that it would merge with a larger player. … PropTiger was always in the space. The combined entity makes them the biggest, giving them the advantage of scale.”
Deepak Dhar, founder of NestAway.com, said: “One of them has a strong top line (housing.com); the other has a strong bottom line. The merger is actually trying to achieve both.”
© 2016 Advanced Interactive Media Group LLC / Classified Intelligence, reprinted with permission